The 417 visa is a temporary visa issued by the Department of Immigration and Border Protection (DIBP) to young people who want to holiday and work in Australia.

More than 4000 overseas workers who had been granted a second-year 417 visa after working in regional Australia were surveyed.

Only 38% of respondents were positive about their experience working in regional areas, but Fair Work said a majority would still recommend a 417 visa to others (though, less recommend a second year).

"However, the survey and other inquiry work also indicated serious concerns about the working conditions for backpackers, particularly while undertaking their 88 days of specified paid work,” the office said.

"The survey findings indicated that a significant majority of recipients (66%) felt that employers take advantage of people on working holiday visas by underpaying them. Most (59%) also agreed that backpackers are unlikely to complain about their working conditions in case their work is not signed off by the employer.

"These fears are reinforced by the experiences of some 417 visa-holders, with 35% of survey respondents stating they were paid less than the minimum wage, 14% revealing they had to pay in advance to get regional work and 6% had to pay an employer to 'sign off' on their regional work requirement.”

The ombudsman also said deductions from pay were common and usually not agreed in writing, as required by law (only 21% of respondents said a written agreement was provided).

"Most survey respondents were unaware of their workplace rights in Australia, with lack of awareness highest among Asian workers,” the ombudsman said.

"The Fair Work Ombudsman is concerned that some unscrupulous employers are targeting this cohort, especially via social media and websites, establishing a business model around the placement of vulnerable visa holders in work and associated accommodation, imposing unlawful deductions on pay and charging fees to place visa-holders into employment.”

Backpackers working on a farm in wet and windy conditions.Scottie Simmonds BUN270612WET1

To be eligible to stay in Australia for a second year on a 417 visa, a visa-holder is required to undertake 88 days specified paid work in their first year in a designated regional area and in certain industries, such as agriculture, fishing, and meat and poultry production.

Fair Work Ombudsman Natalie James said the survey confirmed overseas workers looking to satisfy those criteria, or looking to obtain a second-year visa, were particularly vulnerable to exploitation.

She added that the Working Holiday Maker program, designed to facilitate cultural exchange, was in some cases being treated by visa holders and employers as a 'ticket' to work in Australia.

The report, released at the weekend, showed these dynamics may be impacted by the relatively low minimum wages in countries of origin of some backpackers.

The minimum wages in Taiwan and South Korea over the course of the inquiry were less than half Australia's current minimum wage of $17.70 an hour.

"In particular, the desire for a second-year 417 visa can drive vulnerable workers to agree to work for below minimum entitlements and in some circumstances, enter into potentially unsafe situations,” Ms James said.

"The inquiry findings show that while many 417 visa-holders who work in Australia have a positive experience, many are being subjected to underpayment or non-payment, unlawful deductions, sexual harassment, unsafe working conditions and other forms of exploitation.

"The backpacker labour-force is vital to some industries associated with food production in regional areas but we are at risk of it being a black-market, exploited labour-force if the settings remain the same.”

Noting recent changes in the landscape to tax arrangements and the establishment of the Government's Migrant Worker Taskforce, the report recommends changes to visa rules and laws, better use of existing laws and an enhanced and more joined-up effort across government to make sure 417 visa-holders are better protected and aware of their work rights.

The report also recommends that academics and migration experts be enlisted to help research and solve labour-force issues associated with the need to balance cultural exchange, Australia's international reputation, regional labour-supply needs and the vulnerability of 417 visa-holders.

The inquiry was launched in August, 2014 in response to growing complaints from working holiday makers to the Fair Work Ombudsman and concerns that the 88-day requirement, which at the time need not have been paid work, was being exploited by some employers.

The inquiry sits alongside the Fair Work Ombudsman's Harvest Trail Inquiry focused on the horticulture sector, which commenced in August 2013 and is due to report in 2017.